The old saying that "you have to spend money in order to make money" is a phrase that often perceived by some to be cliché and by others to be the truth.
However, one EV startup has taken the term a little bit too seriously and their books are showing its consequences.
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Canoo
EV startup Canoo (GOEV) — who is known for producing passenger vans, commercial vans, as well as vehicles for NASA's Artemis program, has been raking in the losses and spending way more than it takes in on a very frivolous expense.
According to its full-year earnings report filed on April 1, the startup made only $886,000 in revenue in 2023. Compared to a recorded revenue of zero dollars in 2022, which seems like a win — especially since the company delivered 22 vehicles to partners like NASA, Walmart and the state of Oklahoma.
However, in 2023, Canoo spent twice the amount it made in revenue on private jet flights for its CEO Tony Aquila. As per a recent report by TechCrunch, Canon's regulatory filing reveals that it had spent more than $1.7 million on reimbursing Aquila Family Ventures — an entity owned by the CEO — for use of its private aircraft.
The private jet habit was not something that materialized very recently. According to the report, Canoo paid Aquila Family Ventures $1.3 million in 2022 - a year where their revenue was zero dollars - and $1.8 million in 2021 for use of the private aircraft.
Additionally, regulatory filings also show that Canoo spent $1.7 million in 2023, $1.1 million in 2022, and $500,000 in 2021 in reimbursements to Aquila Family Ventures for shared services support at its corporate office facility in Justin, Texas.
According to a report by Automotive News, Canoo said it expects 2024 revenue to be within the range of $50 to 100 million, which is below analysts' expectations of $152.5 million. The startup also reported a net loss of $302.6 million for 2023, a lower figure compared to its $487.7 million loss in 2022.
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During the announcement of its most recent financial results, Canoo cited limited capital as one of the core issues hindering its ability to continue.
"We will continue to make progress towards accessing additional forms of debt and other non-dilutive forms of capital as we move into 2024," Canoo CFO Greg Ethridge said during its post-earnings call. "Let's be very clear. We'll only raise the capital that we need."
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